ATI Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 6 August 2026: press release. Guidance figures: 3 raised, 2 new. The quarter’s numbers.

Read the filing

Key takeaways

• Sales and earnings rose year-over-year: Sales were $1,261.1 million, up 11% from a year earlier and 10% from the first quarter. Net income attributable to ATI was $151.0 million, up 50%, with diluted EPS of $1.09 against $0.70. Source
• Adjusted EBITDA up 37% on sales: Adjusted EBITDA was $284.4 million, up 37% year-over-year and 23% from the first quarter. It equalled 22.6% of sales. Source
• AA&S margin rose to 23.7%: AA&S segment EBITDA was $147.6 million, or 23.7% of sales, including the $9.9 million gain. Excluding the gain, higher pricing and favorable mix drove the margin increase. Source
• HPMC margin at 24.1% of sales: HPMC segment EBITDA was $153.5 million, or 24.1% of sales, against 24.9% in the first quarter and 23.7% a year earlier. Year-over-year, higher volume and pricing lifted the margin, partly offset by higher manufacturing and period costs. Source
• Backlog reached $4.4 billion: Backlog was $4.4 billion, up 18% year-over-year, according to management. Source
• Adjusted EBITDA margin up 440bp: Adjusted EBITDA margin was 22.6%, against 18.2% a year earlier, a 440 basis point increase. Source
• Operating cash flow of $131.8 million: Cash from operating activities was $131.8 million in the quarter. Capital expenditures were $68.6 million. Source

“We delivered another solid quarter, with results above the high end of our guidance and adjusted EBITDA up 37% year-over-year on 11% sales growth.”

Kimberly A. Fields, Board Chair, President and CEO

Guidance

What changed from last quarter

• Guidance raised: Full-year 2026 adjusted EBITDA, adjusted EPS and adjusted free cash flow guidance were all raised from the prior release ranges. Source
• New guidance: Third quarter 2026 guidance was given for the first time, covering adjusted EBITDA and adjusted EPS. Source
• New: Kimberly A. Fields is now titled Board Chair in addition to President and CEO. The prior release gave her title as President and CEO only. Source

Results and growth drivers

• Sales and earnings rose year-over-year: Sales were $1,261.1 million, up 11% from a year earlier and 10% from the first quarter. Net income attributable to ATI was $151.0 million, up 50%, with diluted EPS of $1.09 against $0.70. Source
• Adjusted EBITDA up 37% on sales: Adjusted EBITDA was $284.4 million, up 37% year-over-year and 23% from the first quarter. It equalled 22.6% of sales. Source
• Adjusted EPS $1.23 against $0.74: Adjusted net income attributable to ATI was $169.7 million, up 59%. Adjusted EPS was $1.23, compared with $0.74 in the second quarter of 2025. Source
• Facility sale gain added $0.06: A $9.9 million gain, or $0.06 per share, from selling a previously closed AA&S facility is included in both GAAP and adjusted results. Source

Segment performance

• AA&S sales up 16% sequentially: AA&S sales were $624.0 million, up 16% from the first quarter and 17% from a year earlier. Aerospace and defense sales grew 19% sequentially. Source
• AA&S margin rose to 23.7%: AA&S segment EBITDA was $147.6 million, or 23.7% of sales, including the $9.9 million gain. Excluding the gain, higher pricing and favorable mix drove the margin increase. Source
• HPMC sales up 5% on jet engines: HPMC sales were $637.1 million, up 4% from the first quarter and 5% from a year earlier. Commercial jet engine sales rose 10% year-over-year. Source
• HPMC margin at 24.1% of sales: HPMC segment EBITDA was $153.5 million, or 24.1% of sales, against 24.9% in the first quarter and 23.7% a year earlier. Year-over-year, higher volume and pricing lifted the margin, partly offset by higher manufacturing and period costs. Source
• Aerospace share of HPMC steady: Aerospace and defense made up 93% of HPMC sales, the same share as in the first quarter. Source

“This quarter reflects the continued evolution of ATI's portfolio toward a more differentiated, higher-margin business, anchored by long-term customer agreements and concentrated exposure in aerospace, defense and specialty energy.”

Kimberly A. Fields, Board Chair, President and CEO

Markets, products and backlog

• Backlog reached $4.4 billion: Backlog was $4.4 billion, up 18% year-over-year, according to management. Source
• Commercial jet engines largest market: Commercial jet engine revenue was $508.3 million, or 40% of sales, against $447.8 million, or 39%, a year earlier. Source
• Defense revenue up year-over-year: Defense revenue was $162.0 million, or 13% of sales, compared with $118.8 million, or 11%, a year earlier. Source
• Conventional energy rebounded sequentially: Conventional energy revenue was $103.5 million, up from $84.2 million in the first quarter and $92.9 million a year earlier. Source
• Nickel alloys reached half of sales: Nickel-based and specialty alloys were 51% of total sales, up from 48% a year earlier. Titanium fell to 15% from 17%. Source

Costs, margins and pricing

• Adjusted EBITDA margin up 440bp: Adjusted EBITDA margin was 22.6%, against 18.2% a year earlier, a 440 basis point increase. Source
• Selling and admin costs rose: Selling and administrative expenses were $95.7 million, against $92.1 million in the first quarter and $82.8 million a year earlier. Source
• Jet engine nickel pricing offset costs: Higher manufacturing costs were partly offset by more volume and favorable pricing of jet engine nickel products. Source
• Corporate expense fell on insurance benefit: Corporate expense was $14.9 million, down from $17.0 million in the first quarter, because of an insurance claim benefit, partly offset by incentive compensation. Source
• Special items of $23.6 million: Pre-tax special items of $23.6 million were excluded from adjusted results, compared with $26.4 million in the first quarter. Source
• Effective tax rate rose to 20.0%: The effective tax rate was 20.0%, up from 11.8% in the first quarter and 22% a year earlier. The sequential rise came from the timing and amount of discrete share-based compensation benefits. Source

“Momentum is carrying into the second half, and we are again raising our full-year guidance for adjusted earnings, EBITDA and free cash flow,”

Kimberly A. Fields, Board Chair, President and CEO

Cash, working capital and returns

• Operating cash flow of $131.8 million: Cash from operating activities was $131.8 million in the quarter. Capital expenditures were $68.6 million. Source
• Adjusted free cash flow $68.6 million: Adjusted free cash flow was $68.6 million in the quarter, against $92.9 million a year earlier. Year-to-date it was $143.2 million. Source
• Working capital fell to 34.3%: Managed working capital was 34.3% of annualized sales, down 50 basis points from the first quarter. Source
• Repurchased $50 million of shares: The company bought $50 million of common stock at an average $159.53 per share, retiring about 0.3 million shares. Remaining authorization was $495 million. Source
• Cash balance rose to $783.0 million: Cash and cash equivalents at the end of the period were $783.0 million, against $319.6 million a year earlier. Source

Strategy and leadership

• Portfolio shifting to higher-margin mix: Management described the portfolio as moving toward a more differentiated, higher-margin business, with long-term customer agreements and exposure concentrated in aerospace, defense and specialty energy. Source
• Investment expanding available capacity: Management linked rising production volumes to targeted investments and operational execution that expand available capacity. Source
• Fields also named Board Chair: Kimberly A. Fields is titled Board Chair, President and CEO in this release, where the prior release gave President and CEO. Source

Figures management reported

Risks management discussed

• Operational: Segment margin fell sequentially on higher costs tied to revised qualification requirements for a new Mexico facility and a titanium electron-beam furnace. Source
• Operational: Management said demand for its aerospace and defense materials is exceeding available supply. Source
• Demand: Conventional energy sales rose in the quarter, which management attributed mostly to timing of demand. Source
• Regulatory: Closed operations expense rose, which management attributed mainly to changes in environmental reserves. Source

Earlier plans management reported on

• Ahead: In the prior release, management said first quarter results exceeded the upper end of the earnings guidance range.

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.